Applied Materials ($400 million) and Micron ($825 million) To Make Substantial Investments in India’s Semiconductor Industry, Effect Of Modi’s State Visit To America?

Applied Materials, a leading American semiconductor manufacturing equipment supplier, has announced plans to establish a state-of-the-art engineering centre in Bengaluru, India.

With an estimated total investment of $400 million over four years, the centre will focus on developing and commercializing advanced technologies for semiconductor manufacturing equipment. It is expected to be located near Applied’s existing campus in Bengaluru.

The engineering centre aims to play a crucial role in advancing India’s position as a global semiconductor hub. Over the first five years of operations, the centre is projected to support more than $2 billion of planned investments, create at least 500 new advanced engineering jobs, and potentially generate another 2,500 jobs within the manufacturing ecosystem.

Our plan to establish a new collaborative engineering centre in Bangalore strengthens our efforts to help advance India on its journey to becoming a global semiconductor hub,” Srinivas Satya, country president of Applied Materials India, said in a statement.

Srinivas Satya, the country president of Applied Materials India, emphasized the centre’s objective of fostering collaboration between engineers, academia, and suppliers.

Applied Materials’ investment aligns with its strategy to strengthen the foundational equipment supply chain for the global semiconductor manufacturing industry.

Prabu Raja, the president of the semiconductor products group at Applied Materials, expressed the company’s vision of deepening collaboration between its engineering talent and domestic as well as global companies operating in India.

We envision Applied’s strong base of engineering talent collaborating more deeply with domestic and global companies operating in India to strengthen the foundational equipment supply chain serving the global semiconductor manufacturing industry,” Prabu Raja.

This collaborative effort aims to enhance the development of semiconductor equipment sub-systems and components while also nurturing future talent in the semiconductor industry through training and development programs.

The engineering centre in Bengaluru is part of Applied Materials’ broader plans to expand its global innovation infrastructure. The company currently operates across six sites in India and maintains a significant presence with product development, research and development, IT, and operations capabilities.

Applied Materials has established partnerships with renowned academic institutions in India, such as the Indian Institute of Science, Bangalore, and the Indian Institute of Technology, Bombay, where it operates a Materials Development centre focused on next-generation chemistry and materials for the semiconductor industry.

In parallel with Applied Materials’ investment, Micron Technology, a prominent chipmaker, has also announced its commitment to building an assembly and test facility in India. The facility, which will encompass 500,000 square feet of cleanroom space, is scheduled to commence operations in late 2024. A second phase of the project will add a similarly sized facility expected to commence construction “towards the second half of the decade.”

Micron plans to spend $825 million on the project, which will support the production of DRAM and NAND products. The facility will focus on transforming wafers into ball grid array (BGA) integrated circuit packages, memory modules, and solid-state drives.

Micron’s decision to invest in India significantly contributes to the nation’s ambition of becoming a prominent player in the global semiconductor manufacturing landscape.

These investments from Applied Materials and Micron are a significant boost to India’s aspiration to become a silicon superpower. India has been actively seeking to attract major chipmakers and enhance its semiconductor manufacturing capabilities.

The announcement of these investments coincided with Indian Prime Minister Narendra Modi’s state visit to Washington, highlighting the growing partnership between the United States and India in various sectors, including technology and defence.

So did a deal that will see General Electric and Hindustan Aeronautics Limited team to manufacture jet engines for India’s Limited Light Combat Aircraft Mk 2. India has also agreed to acquire US-made drones from General Atomics. And as if the day were not full enough, the two nations also sealed a pact to collaborate on human spaceflight.

The implications of these investments extend beyond the economic sphere. India’s strategic ties with Russia remain strong, and deeper defence and aerospace collaboration with the United States is unlikely to alter its long-term relationship with Moscow. However, these partnerships enhance India’s position on the global stage and offer alternatives to supply chain vulnerabilities and geopolitical risks associated with other nations.

The investments by Applied Materials and Micron underscore India’s potential as a major destination for semiconductor manufacturing, building upon its existing pool of semiconductor design talent. The country’s investment attraction scheme has gained momentum with these high-profile commitments from industry leaders. As India continues to develop its semiconductor industry, it is poised to contribute significantly to the global technology ecosystem.

The Last Bit, Applied Materials’ engineering centre and Micron’s assembly and test facility mark substantial investments in India’s semiconductor industry.